Practical guides for running the books
Honest writing on invoicing, cash flow, AR/AP, sales-tax compliance, and the messy realities of keeping a regulated small business audit-ready.
Three-Way Matching: Tying the Purchase Order, the Receipt, and the Vendor Invoice
A vendor invoice on its own is just a request for money. Three-way matching is the control that answers three questions before you pay it: did we agree to buy this, did we actually receive it, and is the bill for the right amount? Here is how the PO, the receiving record, and the invoice line up — and how a disciplined match stops overbilling, duplicate payments, and phantom charges before the money leaves.
Recording a Vendor Deposit: When You Prepay a Supplier
When you pay a supplier before they deliver — a deposit on a custom order, an upfront retainer, or a prepayment to lock in stock — that money is not an expense yet. It is an asset: the supplier owes you goods or services. How to record a vendor prepayment correctly, why it belongs on the balance sheet, and how to clear it when the bill finally arrives.
Retainage: The Slice of Every Invoice You Have to Wait to Collect
On many construction and trade contracts, the customer holds back a percentage of each invoice — often 5 to 10 percent — until the whole job is finished. That retainage is money you have earned but cannot collect yet. How to invoice it, track it separately from ordinary receivables, and make sure you actually get paid the holdback at the end.
When a Customer Check Bounces: Recording an NSF Return on Your Books
A bounced check means a payment you already recorded as collected gets pulled back out of your account, usually with a bank fee. Why an NSF return is more than a deleted payment, how to put the invoice back to unpaid, where the bank fee goes, and how to decide whether to chase the money or write it off.
Deciding Who Gets Terms: Customer Credit Limits for Small Business
Every time you invoice on terms instead of taking payment up front, you are lending a customer money. A simple credit policy — who gets terms, how much, and what happens when they are late — protects your cash without losing good customers. How to set limits, vet new accounts, and use your own aging report as the early-warning system.
Payment Reminders: The Polite Nudge That Gets Invoices Paid
Most overdue invoices are not refusals to pay — they are oversights. A short, factual payment reminder that leads with the balance still due and the original due date recovers most of them without straining the relationship. How to write one, when to send it, and how to keep the cadence.